Applying 'Entire Fairness' In Interested-Party Mergers
Law360, New York (October 27, 2009, 12:21 PM EDT) -- The Delaware Court of Chancery has issued an important decision clarifying the application of the "entire fairness" and "business judgment rule" standards in a going private transaction involving a controlling stockholder. In re John Q. Hammons Inc., Shareholder Litigation, C.A. No. 758-CC (Del. Ch. Oct. 2, 2009).
The decision provides excellent guidance as to how a special committee should navigate an interested-party transaction.
John Q. Hammons Hotels Inc. (“JQH”) was a publicly traded hotel chain founded and controlled by John Hammons. It merged in 2005 into...